Friday, October 3, 2008

Stocks sell off after bailout bill passes

The mood turned sour in Friday afternoon's trading after the House passed the bailout bill. The Dow dropped over 300 points in the afternoon and closed at 10,325, revisiting Monday's previous lows. The S&P finished at an anemic 1099.

In my weekly forecast, I had been uneasy about Friday's action given the position of retrograde Mercury in aspect to Rahu. This expectation was largely borne out given the sharp reversal that occurred. The New York market had been up 3% in advance of the House vote, and ended up over 1% in the red.

Oil declined with stocks while the Euro and gold were little changed.

So another week, another 4% shaved off equities. Now it seems clear that the bailout can no longer save the market. The stage has been set for next week's possible carnage, which seems to centre around Thursday or Friday. Breaking through 10,000 seems to be a certainty, and it will likely be a lot lower than that. We could be down another 10% before there's a relief rally.